About Micro Finance

Microfinance is an important tool of financial inclusion as well as poverty alleviation. The movement was initiated by NABARD for unbanked population known as SHG. The microfinance sector started evolving with participation from private sector leading to formation of MFI. RBI has granted priority sector status of microfinance in 2000-01. Following which the sector witnessed rapid growth in loan disbursement due to large scale access to funds through debt and equity.

Some key highlights are as under:

▪ As of 30th June 17, NBFC-MFIs provided micro-credit to around 2.08 Cr clients*, an increase of 19% over Q1 fy 16-17.

▪ The aggregate gross loan portfolio (glp) of MFIs stood at Rs 35,045 Cr. This represents a yoy growth of 26% over Q1 fy 16-17 and 8% over the last quarter.

However, it is worth noting that this growth number is a factor of large number of delinquent accounts not getting closed.